ISSUES RELATING TO ADR

Mediation Malaysian community remain relatively unaware of ADR methods and are therefore cautious, due principally to their lack of knowledge, experience and understanding of the mediation process. There are no statutory provisions governing mediation in Malaysia. It is therefore likely that any mediation process undertaken will apply by any rules that the parties themselves have agreed upon. The existence of the FMB for example, has shown that there is potential for mediation in Malaysia. Since then, the Bar Council of Malaysia has established the Malaysian Mediation Centre (MMC), with the objective of promoting mediation as a means of ADR. The ADR Committee of the Bar Council is responsible for the proper functioning and implementation of the MMCs objectives. The MMC is currently based in Kuala Lumpur but the Bar Council has indicated that further centers will be established in other States if and when the need arises. The types of cases which the MMC has handled over the years are as follows: family disputes; partnership/joint ventures, probate & estate matters; construction disputes; sale and purchase of property; medical disputes; sale or supply of goods and services/title of goods With further education, there will be greater prospects for the use of mediation in Malaysia. This is so especially as the Court system is not likely to improve substantially in terms of its efficiency and cost effectiveness in the near future. International or foreign parties are less inclined towards local litigation, mainly because of the language in which proceedings are conducted and the fact that foreign lawyers are not be permitted to represent them. Mediation is a popular process to prevent conflicts over common resources, but there is little clean insight into its effectiveness and mechanisms. Our experimental approach allows for a comprehensive analysis of third-party intervention into potential conflicts and circumvents key problems linked to the analysis of field data. A mediator who credibly threatens punishment in the case of uncooperative behavior achieves the efficient solution in most cases. Similar results are obtained even if the mediator is biased toward one party or has no incentive to intervene. When cooperation fails, communication without credible punishment threats leads to particularly low payouts for the losing party. Our article focuses on key characteristics of mediation processescommunication, punishment, and mediator interestthe interaction between these characteristics, and their net and combined effects on conflict prevention. Recent studies have shown that mediation efforts are indeed a factor for successful crisis management and agreement between conflict parties. However, which characteristics of the mediation process are exactly conducive to conflict prevention (and which lead to failure) is still part of an ongoing controversy.

With regard to communication, there is a debate about its effectiveness in producing cooperative outcomes. In the mediation literature, some scholars have argued that information provision is an effective mediation tool. The prime role of information is reducing uncertainty. Moreover, by providing the disputants with information about each others reservation points, mediators may also help the disputants locate the bargaining set. Other scholars have argued that information provided by mediators may not be sufficient to achieve cooperative outcomes. Thus, communication should not make a difference in the outcomes achieved in social dilemmas. Understanding mediation as a form of cheap talk means that disputants will have an incentive to misrepresent their true reservation points and to bluff to the other side. This has also consequences for the information provided by the mediator. According to Kydd (2003, 599) if there is an incentive to bluff to the other side, there will be an incentive to bluff to the mediator. A conflict party will not reveal its true reservation points to the mediator since the latter will make this information public. Hence, as Smith and Stam (2003), note, there is no way for the mediator to reach an outcome that the disputants could not have reached on their own. Only if mediators have access to outside information, information provision by the mediator can be effective. Moreover, there is a controversy in the literature about mediator power, in particular about punishment capabilities. The question is whether mediators should only use soft mediation tools (such as information provision) or whether they should be able to carry a hard stick (in the form of punishment for uncooperative behavior) as well. On one hand, some authors have argued that punishment strategies may damage the atmosphere of good will, trust, and joint problem solving (Princen 1992). Indeed, punishment and the threat of force can lead to an escalation of the conflict. Experimental evidence on punishment with retaliation suggests that emotions play an important role in this context (Hopfensitz and Reuben 2009). Following Ostrom, Gardner, and Walker (1994) and Falk, Fehr, and Fischbacher (2001), punishment and communication may also be complementary tools and work hand in hand to achieve efficient outcomes (see Gardner, Elinor, and Walker 1992). Mere communication might not always be effective, since some players may indeed behave according to the standard economic approach and use communication only to pretend cooperation while acting selfishly afterward (Brandts and Cooper 2007). Hence, people may actually be worse off if they believe these false promises and do not view them as cheap talk. To overcome this problem, mediators must have muscles and the possibility of punishing such defectors. Last but not least, there is also a controversy about mediator interests. Mediators are often thought to be more effective if they are unbiased (or, impartial) or have no preferences over the issue in dispute (see, e.g., Fisher 1995), a point affirmed by veteran practitioners of mediation (see Haig 1984). However, some scholars have questioned the role of mediator impartiality. Touval (1982) argues that a mediator biased toward one party can put pressure on its ally. Similarly, Carnevale and Arad (1996) have suggested that bias might add to the mediators ability to extract concessions from the favored party.

Drawing from cheap talk models, Kydd (2003) argues that a mediator needs to be biased in order to convey information in a credible way. In his view, only a mediator who shares policy preferences with one party can induce this party to make a concession. It is nevertheless clear that only a moderate degree of bias is optimal. Final Thoughts . Nevertheless all parties concerned must do more to promote other means of ADR to the general public at large. One can only hope that the litigating public and bar will recognize the benefits of resolving disputes through alternative dispute resolutions (ADR); as a judge, one is constantly amazed at how many matters can be resolved if the parties face up to the practical problem that in many cases there be time to pay and payment must be stretched out over time. As I have said, you cannot get blood from a stone but you can get some juice from a turnip if it is squeezed the right way.